Wednesday, September 16, 2009

Cablevision a GO with Network DVR

The U.S. Supreme Court will not hear an appeal by a group of major movie and television studios attempting to block Cablevision’s rollout of a network-centric DVR. The move came about a month after the U.S. Department of Justice Solicitor General urged that the Supreme Court not hear the appeal.

Cablevision, and several other multi-system operators, are now essentially free to begin offering the remote-storage digital video recording, which will allow the companies to offer DVR services to viewers without a costly hardware installation in the home. With the resulting reduction in capital expenditures, installation time and home visits, cable companies are expected to significantly boost their respective DVR subscribers. Furthermore, the drop in cost would likely be passed on to consumers, again fueling new signups.

The move is still not without controversy, from both a programmer and a customer perspective. With a substantial addition of DVR-recording customers, more advertisements risk the potential of being “skipped” by viewers, thus diluting the impact of the ads, and placing advertising revenue in jeopardy. However, some rumors indicate that Cablevision may disable the ad-skipping feature, which would negate one of the most popular aspects of DVR service. In either event, the large-scale increase in DVR service may significantly change the televisions viewing experience.

In 2006, Turner Broadcasting System, ABC, CBS, NBC, 20th Century Fox, Paramount Pictures and Disney Enterprises sued Cablevision, alleging that the company had not reached any program deals for the service and the remote-storage DVR infringed their copyrights. Furthermore, the studios feared the prospect of having their content stored and accessed on the remote servers of a commercial entity versus the personal hardware of a private user. Cablevision countered that the RS-DVR would operate no differently than a set-top DVR and therefore needed no special programming agreements. A subsequent ruling by the 2nd U.S. Circuit Court of Appeals supported this contention.

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